Steel Exchange India Limited

Basic Materials — Steel · NSE

₹10.24₹0.00 (0.00%)

DalalBaazaar Score

40 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

Company site ↗

The 60-second version of Steel Exchange India Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Steel Exchange India Limited engages in the manufacture and sale of steel products under the SIMHADRI TMT brand name in India. It operates through three segments: Iron and Steel, Power, and Logistics.

IndustrySteel

SectorBasic Materials

Employees588

Annual revenue₹1,058 Cr

How does it make money?

Turns over ₹1,058 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹12 left at the operating level before interest, tax and depreciation. Each of its 588 employees supports ₹1.80 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.80 Cr

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, JINDAL STEEL LIMITED, STEEL AUTHORITY OF INDIA. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 9.6% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE10.8%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -24% while net margin moved -160% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect-24%

Margin effect-160%

DalalBaazaar Score

40/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 8.7% a year

Quality vs. Valuation

Company Quality

36/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

55/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

39.4x

2Y Median

57.0x

28 monthly readings · mean 74.3x · range 32.3x–155.1x

Sector Median

18.2x

median of 4 sector peers

🟢Current valuation is approximately 31% below its 2y median of 57.0x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

⚠️Against its sector it trades 117% above the peer median of 18.2x.

vs. its own history

Cheap

57.0x median over 28 months · -31%

vs. sector peers

Expensive

18.2x median of 4 peers · +117%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

13.7x

PEG

1.18

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 6.9% to 11.9% over 3 years.
Return on equity is rising
ROE has improved from -11.4% to 3.5%.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

6 items require attention · 4 high · 2 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.7x — little room if earnings dip.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Receivables growing faster than salesFinancial
Receivables up 97% against revenue up -24% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 40% against revenue up -24% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹45 Cr in the latest year.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 23% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 6.9% to 11.9%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 31% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 3.3x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 97% against revenue up -24%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 117% above the peer median. That premium needs a reason that persists, or it closes.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 10%✓ 11.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 3.3x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹45 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 1.7x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✓ 9.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✗ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 5 neutral · 3 weak

Market Cap

₹1,306 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

39.4x

Fair

Fairly valued against the generic band

P/B Ratio

1.65x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹0.26

Profitable

Profitable on a per-share basis

ROE

3.5%

Weak

Weak capital efficiency

ROCE

9.6%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.54x

Low

Conservative leverage

Revenue Growth (YoY)

-10.1%

Shrinking

Sales are contracting

Profit Growth (YoY)

33.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹45 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

10.4%

Average

Average margins

Net Margin

3.1%

Average

Average bottom-line conversion

Current Ratio

2.26

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.59

Defensive

Steadier than the market

52W Range Position

47%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

11.0 / 11.0

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

30.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,388 Cr	₹1,089 Cr	₹1,142 Cr	₹1,058 Cr	-8.7%
EBITDA	₹96 Cr	₹91 Cr	₹119 Cr	₹126 Cr	+9.3%
EBITDA Margin	6.9%	8.3%	10.4%	11.9%	—
PAT (Net Profit)	-₹59 Cr	₹11 Cr	₹26 Cr	₹27 Cr	—
EPS	₹-0.71	₹0.09	₹0.22	₹0.22	—
ROE	-11.4%	1.6%	3.7%	3.5%	—
ROCE	9.6%	6.8%	11.5%	9.6%	—
Total Debt	₹340 Cr	₹382 Cr	₹358 Cr	₹418 Cr	+7.0%
Free Cash Flow	₹122 Cr	-₹97 Cr	₹4 Cr	-₹45 Cr	—

🔴 Revenue has shrunk at 8.7% a year over 3 years.

🟢 EBITDA has grown at 9.3% a year over 3 years.

🟢 EBITDA Margin has risen from 6.9% to 11.9% over 3 years (+5.0 pts).

🟢 PAT (Net Profit) has turned positive, from -₹59 Cr to ₹27 Cr.

🟢 EPS has turned positive, from ₹-0.71 to ₹0.22.

🟢 ROE has risen from -11.4% to 3.5% over 3 years (+14.9 pts).

🟡 ROCE has held roughly flat at 9.6% over 3 years.

🔴 Total Debt has grown at 7.0% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹122 Cr to -₹45 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,375 Cr

Total Liabilities

₹607 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹38 Cr

Capex

-₹7 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

61.6%

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
JINDAL STEEL LIMITED	39.1x	5.3%
STEEL AUTHORITY OF INDIA	16.5x	7.1%

Recent News

1 positive2 mixed3 general

Steel Exchange India Cuts Debt By 30% Repaying ₹102 Crore To Target Debt-Free Status

Sahi, 07 Jul

Steel Exchange India Share Price: Price Fall and Valuation

Univest, 07 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Concerns Surrounding Steel Exchange India's (NSE:STEELXIND) Performance

Simply Wall Street, 01 Jun

Steel Exchange India Hits Record Rebar Production; Shares Rise 0.09%

HDFC Sky, 05 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Steel Exchange India Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 30 Aug

Steel Exchange India Q2FY27 Results: Revenue up 45% YoY to ~₹340 crore

scanx.trade, 07 OctResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Watch Items

Revenue growth is negative (-10.1%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

MiddlingFinancial Health · Profitability · Valuation

WeakBusiness Quality · Growth · Risk

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 4 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x · see Key things to watch ↑